Continental Resources' Earnings—And Stock Reaction

Behind Continental’s Production Expectation and Capex Guidance for 2017

By Keisha Bandz
|
Aug 11, 2017 2:52 pm EST

CLR’s 2Q17 production

Continental Resources’ (CLR) 2Q17 production volumes averaged 226.21 Mboepd (thousand barrels of oil equivalent per day). This was ~3.1% higher than its production levels one year ago and 5.8% higher than its 1Q17 volumes.

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CLR’s oil production in 2Q17 was 55% of its total 2Q17 production. CLR noted that this was lower than the consensus estimate primarily because of its working interest adjustments.

For 3Q17, WLL has projected its production to be 58% oil as a result of additional Bakken and Springer wells being completed.

CLR’s updated 2017 production growth guidance

CLR’s 2017 production growth guidance range was raised to 230 Mboepd–240 Mboepd from the previous guidance range of 220 Mboepd–230 Mboepd. It expects to finish or exit 2017 with a production of 267.5 Mboepd (at the midpoint), compared with the previous guidance of 255 Mboepd. This represents a growth of 27.5% (at the midpoint), compared with its 2016 exit or 4Q16 levels.

The company believes that its strong 2017 exit rate will “set up multi-year double-digit growth.” CLR expects its production to grow 20.0% (compounded annually) from 2018 to 2020.

Next quarter, CLR’s production is expected to average between 240 Mboepd–250 Mboepd. Production expenses for 2017 are expected to be $3.50–$3.90 per boe (barrel of oil equivalent), compared with the average of $3.65 per boe in 2016.

2Q17 realized prices

Continental Resources’ average realized crude oil price (DBO), excluding hedges, rose from $38.38 per barrel in 2Q16 to $41.91 per barrel in 2Q17. Its average realized price for natural gas (UNG), excluding the effect of hedges, rose from $1.31 per thousand cubic feet in 2Q16 to $2.63 per thousand cubic feet in 2Q17.